​Global upstream M&A reaches US$41.7 billion in Q3 2017

​Global upstream M&A reaches US$41.7 billion in Q3 2017

Oct. 11, 2017, 2:23 p.m. |

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Workers with Russia's Rosneft drilling the northernmost well on the Russian continental shelf. For the second time in the past year, the company is undergoing a significant shift in its ownership structure. Image: Rosneft

Evaluate Energy’s latest M&A report shows that the third quarter witnessed US$41.7 billion of new upstream oil and gas M&A deals around the world.

This is a 50% increase in total spending compared to Q2 2017 and it is also just above the average quarterly spend of US$39.8 billion since the oil price downturn began in late 2014.

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The two largest deals this quarter were both outside of North America.

For the second time in the past year, Russia’s Rosneft is undergoing a significant shift in its ownership structure. Glencore and Qatar Investment Authority sold a 14.16% stake in the company to a private Chinese investment company for US$9.1 billion, having only bought their original 19.5% interest in December 2016.

Denmark’s Maersk agreed a US$7.4 billion deal to sell its E&P business unit to France’s Total, becoming the latest large diversified European company to offload its oil and gas arm after DONG Energy and ENGIE agreed similar deals last quarter.

In Canada, it was a big quarter for Cenovus Energy Inc. and Paramount Resources Ltd. The former continued its plans to balance the books after its C$17.7 billion acquisition from ConocoPhillips by agreeing two major sales in September, while the latter followed up an extended period of asset sales with two significant acquisitions in July that will see its production rise to around 90,000 boe/d by year-end.

The Permian Basin had a relatively quiet time in terms of new deals for the second consecutive quarter, but still dominates U.S. deal totals in 2017 with US$24.2 billion in new deals agreed. This quarter’s biggest U.S. deals involved the STACK formation in Oklahoma and the Williston Basin in North Dakota.

Full analysis on all of these deals and transaction trends over the past three months is included in the Evaluate Energy M&A review, which can be downloaded here.